Following Newt Ginrich‘s fusillade of attacks against Mitt Romney‘s time at Bain Capital — including a 29 minute documentary — a number of outside observers are pushing back against the idea that Romney was involved in some sort of corporate raiding to fill his own pockets at the expense of hard-working middle class Americans.
In Politico today Steve Rattner writes that you can blame Mitt Romney for many things but Bain isn’t one of them.
Most important, Bain Capital is not now, nor has it ever been, some kind of Gordon Gekko-like, fire-breathing corporate raider that slashed and burned companies, immolating jobs wherever they appear in its path.
Wall Street has its share of the “vulture capitalists” that Texas Gov. Rick Perry enjoyed mocking in South Carolina earlier this week. But Romney was almost the furthest thing from Larry the Liquidator.
Instead, with modest exceptions (keep reading to learn more about these), Bain Capital was a thoroughly respectable — nay, eminent — investment manager that successfully discharged its responsibility of earning high returns for its investors by deploying capital in companies privately rather than by buying shares in the public market. (Hence the name, private equity.)
While no one likes seeing jobs disappear, eliminating unnecessary overhead and even entire divisions if they cannot be made sufficiently profitable is at the heart of a successful economy — the process Joseph Schumpeter famously described as “creative destruction.” How strange for conservatives like Newt Gingrich and Perry to be questioning the core of free market economics.